StanChart predicts Bitcoin may surpass $120K target for Q2 due to surge in institutional and sovereign interest.

Geoffrey Kendrick, the director of digital assets research at Standard Chartered, indicated that Bitcoin (BTC) may be poised to hit new all-time highs quicker than anticipated, fueled by increasing interest from institutional investors and a global reallocation of assets.

In a note to investors dated May 8, Kendrick revealed that his earlier $120,000 forecast for Bitcoin’s price in the second quarter might actually be too conservative given the current market dynamics.

He expressed his revised views by stating:

I regret that my June target of $120,000 might be underestimated.

As per the latest data, Bitcoin was trading at $101,751, reflecting a 5.66% increase in just 24 hours.

Changing Perspectives Lead to Increased Investment

Kendrick observed a significant shift in the perception of Bitcoin over recent months. The cryptocurrency, once primarily regarded as a risky asset, is now increasingly being seen as a strategic reserve asset.

He pointed out that Bitcoin has transformed into a medium for redirecting investments away from traditional US equities toward alternative value stores. Instead of speculation driving the market, actual inflows from ETFs and institutional investors are now propelling the price surge.

Kendrick noted that US-listed spot Bitcoin ETFs have attracted $5.3 billion in just three weeks, and after accounting for short hedge positions and basis trades, the net inflow is likely over $4 billion.

He emphasized that these inflows signify a notable uptick in demand, which could contribute to higher prices in the near future.

Additionally, Kendrick highlighted the impact of corporations and sovereign entities on Bitcoin’s recent market success. A particular entity has significantly increased its Bitcoin holdings to 555,450 BTC, equating to 2.6% of the total available supply.

The firm plans to secure an extra $84 billion for further Bitcoin acquisitions, potentially raising its total holdings to over 6% of the total supply.

Growing Institutional Support

At the same time, sovereign wealth funds and central banks are beginning to participate in Bitcoin as well. Kendrick referenced Abu Dhabi’s position of 4,700 BTC in IBIT as of late December, indicating that more long-term buyers have likely emerged since that time.

He also mentioned recent actions from the Swiss National Bank and Norway’s Norges Bank, both of which have begun to establish positions in MSTR.

Kendrick also highlighted New Hampshire’s recent passage of the Strategic Bitcoin Reserve bill, suggesting it may serve as a catalyst for broader state-level adoption in the US. He anticipates that other states will propose similar initiatives to integrate Bitcoin into their financial strategies.

As of May 8, Arizona has successfully legislated the establishment of a Bitcoin reserve fund, while Texas is nearing approval. Approximately 11 other states are currently deliberating similar proposals.

With more institutional disclosures looming in the coming week through 13F filings, Kendrick cautioned that Bitcoin’s trajectory may continue to yield positive surprises.